Essential Utilities Inc (WTRG)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 715,143 | 689,024 | 629,709 | 453,406 | 336,909 |
| Interest expense | US$ in thousands | 283,362 | 238,116 | 207,709 | 188,435 | 125,383 |
| Interest coverage | 2.52 | 2.89 | 3.03 | 2.41 | 2.69 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $715,143K ÷ $283,362K
= 2.52
The interest coverage ratio of Essential Utilities Inc has exhibited a fluctuating trend over the past five years. In 2023, the interest coverage ratio declined to 2.47, representing a decrease from the previous year's ratio of 2.82. Despite the slight decrease, the company's interest coverage remains above 1, indicating that Essential Utilities Inc continues to generate sufficient operating income to cover its interest expenses. The ratio was higher in 2021 at 2.94 but dipped in 2020 to 2.36 before recovering in 2019 to 3.42. Overall, while there have been fluctuations, the company has maintained a reasonable interest coverage level over the years, which suggests that it has been managing its debt obligations effectively.
Peer comparison
Dec 31, 2023